Housing loans make up 31% of banks' DBUs

It constituted $194b of domestic banking unit.

Following the easing of property cooling measures in March, the Singapore residential property market has enjoyed renewed interest.

According to Maybank analyst Ng Li Hiang, take-up rates at property launches have improved whilst the secondary market has been more active. Land tender bids have beat expectations.

"These are positive for bank lending to the housing and building and construction (B&C) sectors," Ng noted.

At the end of May 17, the banking system’s domestic banking unit (DBU) housing loans constituted 31% of advances or $194b.

For the three bank giants in Singapore, housing and B&C loans together form 40-50% of total loans, with housing loans comprising 21-27% as at 1Q17.

"In our assessment, housing loans remain an important lending segment for the three banks. Banks are prepared to tighten pricing to attract new borrowers, potentially limiting the upside to earnings," the analysts said, noting that should property transactions be sustained, there could be upside to our current system loan growth assumption of 6-7%.